Last year, JPMorgan Chase committed to ending its lending relationship with private prison companies after two years of dialogue with shareholders, including Praxis Mutual Funds. In the weeks following JPMorgan Chase’s announcement, all the largest U.S. banks also committed to ending their credit relationships with private prison companies.
Praxis is now joining other investors to pursue engagement with regional and international banks that have lending relationships with the private prison sector, including Citizens Financial Group, Regions Financial Corp. and Barclays. Investors sent letters to the three banks, highlighting each bank’s responsibility to conduct human rights due diligence on its financial relationship to private prisons. The letters also asked the banks to provide an assessment of the human rights risks of their lending facilities with private prisons.
The private prison industry has exposure to several human rights risks. Prison conditions are the subject of many human rights concerns. Current U.S. immigration policies include construction and management of immigrant detention facilities by the private prison sector. Additionally, the private prison business model requires a high number of people to be continuously incarcerated, and private prison companies have been active in promoting legislation that encourages higher incarceration rates, such as mandatory minimum sentences.
Praxis will continue to engage banks that have exposure to private prison companies.